What is appropriate discount rate for valuing acquisition

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Problem - MERGER ANALYSIS - Depreciation-generated funds would be used to replace worn-out equipment, so they would not be available to TransWorld's shareholders. The risk-free rate is 8%, and the market risk premium is 4%.

a. What is the appropriate discount rate for valuing the acquisition?

b. What is the continuing value?

c. What is the value of GCC to TransWorld?

Reference no: EM132802895

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